How To Invest In The Most Important Currency of 2013 With ETFs

For example, if you own any large mutual or exchange-traded funds (ETF) that invest in U.S.-based blue-chips, you already own international juggernauts like McDonald’s Corp. (NYSE:MCD) or Procter & Gamble Co. (NYSE:PG). That means your returns fluctuate on the strength of foreign currencies where these companies do business.

When the dollar is weak, international stocks and bonds are worth more in dollars.

Have you ever wondered how billionaires continue to get RICHER, while the rest of the world is struggling?

"I study billionaires for a living. To be more specific, I study how these investors generate such huge and consistent profits in the stock markets -- year-in and year-out."

These trade like stocks and track the performance of one or more currencies in the same way that many index funds track the S&P 500 index.

Keep in mind that profits from currency-based ETFs and ETNs are taxed as ordinary income — typically a higher rate than capital gains.

CDs, Savings Accounts: Some banks offer certificates of deposit (CDs) that earn interest at local rates in specific countries.

Everbank.com offers a World Currency and a basket CD that includes a mix of various currencies. Like all CDs your money is tied up and there are penalties for early withdrawal.

It also offers a foreign currency account that functions like a money market and allows the transfer of money between major currencies.

Foreign Bond Funds: These are mutual funds that invest in foreign government bonds and earn interest in foreign currency. If the foreign currency goes up in value, the earned interest increases when converted back to dollars.

You see, with central bankers around the planet printing money like crazy to stimulate flagging economies, currencies like the dollar, euro and yen are in a “race to the bottom.”
Ben Bernanke and the Fed have helped explode the U.S. national debt to $16.6 trillion—more than 100% of GDP.

The European Central Bank has printed up more than one trillion euros to prop up Spain, Greece, Italy and others. And now Japan just promised to throw roughly $1.3 trillion more on the fire.

Meanwhile, China’s quietly built up more than 18 currency swap agreements with partners like Australia, Russia, Brazil and India to bypass the greenback and settle trades in yuan instead of dollars.

“It’s hardly by coincidence that yuan-settled trade jumped 41.3% to nearly 3 trillion yuan in 2012…after it increased by more than 300% in 2011,” Fitz-Gerald wrote in a recent column. “Demand for the yuan is growing at such a staggering rate that your financial future will be built upon it.”

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